Best mortgage deals for first-time buyers

Buying your first property can be a daunting task. The sheer variety of mortgage products means it can be hard to compare your options to find the best offers. 

Each week, we review the market to find the best variable and fixed rate deals currently available for high loan to value (LTV) borrowers - these are our Moneywise Best Buys.

Remember that once any fixed rate period ends the mortgage will revert to a standard variable rate (SVR), so make a note in your diary and switch to a cheaper deal when that happens.

Our example first-time buyer has a 10% deposit and is looking to buy a £200,000 property over 25 years. For ease of comparison, we’re assuming any bank or building society fees are paid up front. Otherwise interest will be charged on the fees, which will add hundreds of pounds to the overall cost of your loan.

Best fixed rate mortgage deals

Yorkshire Building Society, up to 90% LTV, 1.85%
Fixed until 31 November 2019, then reverts to SVR (currently 4.74%)

This deal from Yorkshire Building Society comes with £950 in fees. Repayments are £750 a month, which is £9,473 a year over the first two years. 

Principality Building Society, up to 90% LTV, 2.2%
Fixed until 31 August 2019, then reverts to SVR (currently 4.74%)

This deal from Principality Building Society comes with £330 in fees. Repayments are £781 a month, which is £9,532 a year over the first two years. 

Longer fixed rate mortgages

Atom digital mortgages, up to 90% LTV, 2.55%
Fixed until 30 September 2022, then reverts to SVR (currently 3.75%)

For those looking to fix for a longer period then Atom Digital Mortgages offers a 2.55% rate, fixed for five years. This mortgage costs £812 a month - £9.969 per year over the fixed period - and comes with £1,120 in fees.

Atom digital mortgages, up to 90% LTV, 2.75%
Fixed until 30 September 2022, then reverts to SVR (currently 3.75%)

This deal from Atom Digital Mortgages offers a 2.75% rate, fixed for five years. This mortgage costs £830 a month - £10,008 per year over the fixed period - but with only £220 in fees.

Variable rate mortgages

West Bromwich Building Society, up to 90% LTV, 2.19%
1.8% discount until 31 October 2019, then reverts to SVR (currently 3.99%)

For buyers who are willing to risk a rate rise (or gamble on a further rate cut), West Bromwich Building Society offers a 1.8% discount on its SVR. There is a £500 cashback incentive and no upfront fees. The annual cost is £9,224.

Best mortgages for larger deposits

NatWest, up to 75% LTV, 1.81%
Fixed until 31 August 2019 then reverts to SVR (currently 3.75%)

NatWest offers a two-year fixed rate up to 75% LTV at 1.81%. There is a £248 fee to pay but £500 cashback on offer. The monthly repayments on a £150,000 advance are £622, equivalent to £7,276 a year. 

Bank of Ireland UK, up to 75% LTV, 2.14%
Fixed until 31 August 2022 then reverts to SVR (currently 4.24%)

There are £270 in upfront fees to pay, but £750 cashback more than covers this outlay. Monthly repayments are £646 so the effective annual cost is £7,657. 

Interest-only mortgage deals

If you’re looking for interest-only options, remember the rules are now a lot stricter and you’ll need to show a well-thought out plan for repaying the capital at the end of the mortgage. Monthly repayments are much lower than with capital repayment, but you'll pay more interest on an interest-only mortgage in the long run. 

Not every provider will lend on an interest-only basis, so if you’re looking for one it’s best to speak to a mortgage broker. Our mortgage tool can help you get a feel for the rates on offer.

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Call free on 0800 073 1936 or see mortgage best buys online.

Published: 29 July 2015
Last updated: 25 July 2017

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